All other green campaigns become futile without tackling the economic system and its ideological defenders. Economics is only dismal because there are not enough of us making it our own. Read on and become empowered!

24 October 2013

There has been some confusion since Ed Davey’s announcement
of the details of the plan for building a reactor at Hinkley C in Somerset, and
some of this confusion may not be accidental.

First, we have the issue of whether the government is in a
position to make this decision. In fact, it is not. Any arrangement that
involves explicit or implicit subsidies needs to be investigated under the EU’s
state aid rules which are ‘forms of
assistance from a public body, or publicly-funded body, given to selected
undertakings (any entity which puts goods or services on the given market),
which has the potential to distort competition and affect trade between member
states of the European Union’ (definition from the BIS website).

During parliamentary questions on 15 May to Michael Fallon,
Minister of State for Business and Enterprise, Martin Horwood, MP for
Cheltenham, asked the minister ‘how
he proposes to comply with the standstill obligation in EU state aid law if he
enters into an investment contract or sets a strike price before the European
Commission has decided whether to approve such measures’. Fallon replied that
‘Any investment contract, if offered, will contain a condition dependent on a
state aid decision from the European Commission’ (Hansard, 15 May 2013).

The minister’s
clear view is that the setting of a strike price for energy will require a
consideration by the EU Commission in terms of its compliance with competition
law, law that relates specifically to the granting of state subsidies that may
distort competition. Hence we can infer that the minister himself believed that
this arrangement amounted to a public subsidy.

This appears to
contradict the statement made on Monday by Ed Davey that ‘For the first time, a
nuclear power station in this country will be built without money from the
British taxpayer’. This is a carefully phrased statement, since the strike
price is an implicit guarantee while the insurance against increasing costs are
a risk on the public, which is to say nothing of the responsibility for
disposing of the waste the plant generates.

While Davey is
nervous about breaking his previous pledge that there would be no subsidies for
nuclear, South-West Liberal Democrat MEP Graham Watson is not. As reported back in April he told the somewhat 'Business Green' that he
supports subsidies for nuclear power in the South-West. Watson'defended the UK government's right to offer hefty state aid support for new
nuclear reactors'.

Specifically in
relation to Hinkley C, back in May the minister was asked by Paul Flynn at what
stage the negotiations with EDF had reached. The minister replied that ‘in the
case of Hinkley Point C, the Government have committed to provide summaries of
reports from external advisers and analysis on the value for money of any
contract agreed’. These reports were not forthcoming on Monday and I would be
interested to see them if anybody knows where to track them down.

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